Question

Carlita began 2014 with an interest payable account balance of $13,000. during 2014, it paid $5,000 in interest to its lenders. on december 31, 2014, what is its interest payable account balance?

Answer 1

Answer:

Its interest payable account will be $18,000 at the end of 2014.

Further details:

According to the statement of question, Carlita began 2014 with an interest payable account balance of $13,000 and during 2014 its lenders paid more $5,000.

So by adding these two amounts we get $18,000. It implies that at the end of 2014, Carlita’s interest payable account is $18,000.

Related terms:

Accounts payable:

Accounts payable (AP) is an accounting entry that signifies a company's responsibility to pay off a short-term debt to its creditors or dealers. It seems on the balance sheet under the current accountabilities.

Interest payable:

                     Interest payable is the measure of interest on its dept and capital rents that an organization owes to its moneylenders and rent suppliers as of the asset report date. This sum can be an essential piece of a fiscal summary examination, if the measure of intrigue payable is more noteworthy than the ordinary sum - it demonstrates that a business is defaulting on its obligation commitments. Interest payable can incorporate both charged and accumulated interest, however (on the off chance that material) collected interest may show up in a different "gathered interest obligation" account on the monetary record. On account of capital rents, an organization may need to derive the measure of interest payable, in view of a deconstruction of the hidden capital rent. interest is viewed as payable independent of the status of the hidden obligation as momentary obligation or long haul obligation. Momentary dept is payable inside one year, and long haul dept is payable in over one year.

Subject: Business

Level: High school

Keywords:

• Account payable

• Interest payable

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Answer 2

The interest payable account balance is $18,000 at the end of 2014. When you take the initial balance of $13,000 and add to that the $5000 interest payment, the result is $18,000. 13,000 + 5,000 = 18,000